U.S. manufacturing output rises 1.1 pct. in November

WASHINGTON – U.S. factories rebounded in November from Superstorm Sandy, boosting production of cars, equipment and appliances.

The Federal Reserve said Friday that factory output increased 1.1 percent in November from October. That offset a 1 percent decline in the previous, which was blamed on the storm.

Total industrial output at factories, mines and utilities rose also rose 1.1 percent last month.

Auto production jumped 4.5 percent to lead widespread increases in factory output. It was the first increase in production at auto plants since July. Production of primary metals, wood products, electrical equipment and appliances all showed gains.

The increase in factory production is a hopeful sign that business are not yet panicking about the "fiscal cliff". That's the combination of tax increases and spending cuts that are set to take effect in January if President Barack Obama and Republican lawmakers can't reach a budget deal before then.

Still, many companies have delayed purchases of machinery and equipment this year because of uncertainty surrounding taxes and government spending. And other data suggest those fears continued to weigh on the manufacturing sector last month, despite the increase in factory production.

U.S. manufacturing activity shrank in November to the slowest pace since July 2009, according to a closely watched index of manufacturing activity compiled by the Institute for Supply Management.

China's manufacturing activity rose to a 14-month high in December, adding to signs the world's second-largest economy is recovering, a survey showed Friday. But export orders weakened, a reminder that the global economy is still weak.

Economists say the U.S. economy is growing in the current October-December quarter at an annual rate below 2 percent. That would be slower than the 2.7 percent growth rate in the July-September quarter and too weak to rapidly lower the unemployment rate.

The job market is making steady gains. Employers added 146,000 jobs in November. That's about the same as the average monthly gain of 150,000 in the past year.

The unemployment rate fell to 7.7 percent — a four-year low — from 7.9 percent in October. But the decline occurred mostly because more people without jobs gave up looking for work. The government counts people without jobs as unemployed only if they're actively seeking one.